U.S. consumer confidence fell by the most in more than three years in February

On February 25th, U.S. consumer confidence fell sharply in February, and pessimism about the future has returned. The Consumer Confidence Index fell 7 points to 98.3 in February, while the Expectations Index fell 9.3 points to 72.9, according to Conference Board data. For the first time since June 2024, the Expectations Index fell below the 80 threshold that signals a recession. Stephanie Guichard, Conference Board senior economist, said: "The Consumer Confidence Index recorded its largest one-month decline since August 2021 in February, marking the third consecutive month-on-month decline, bringing the index to the bottom of its range since 2022. Of the five components, only consumers' assessment of current business conditions improved slightly. Consumers became pessimistic about the future business environment, as did their optimism about future incomes. Pessimism about future job prospects climbed to a ten-month high. "Guichard added:" Average 12-month inflation expectations surged from 5.2 per cent to 6 per cent in February. Mention of inflation and general prices remained high in letter responses, but the focus has shifted to other topics. Mention of trade and tariffs rose sharply, returning to levels not seen since 2019. "